Dr. Perryman explains the logic behind this policy and its prior role during the pandemic.
For the first time in history, the kingdom of Saudi Arabia is selling bonds on international markets. Dr. Perryman says the effort to force out Texas shale producers has come at a steep price.
On October 19, Saudi Arabia held its first international bond sale - EVER! The sale, which received orders of $67 billion for the $17.5 billion in bonds offered, is the largest to date from an emerging market economy. Investors eagerly welcomed the offering as a way to achieve further exposure in the Middle East given recent expectations that the price of oil will rebound next year. The kingdom offered dollar-denominated bonds with yields slightly higher than US Treasuries with similar maturities. In total, Saudi Arabia raised $5.5 billion of both 5- and 10-year bonds and another $6.5 billion in 30-year bonds.